Italy’s prime minister has been thrown a potential lifeline as cracks spread within his centre-right coalition.
Silvio Berlusconi is widely believed to have already lost the numbers he needs to survive in parliament.
But his agreement to let the EU and IMF monitor Rome’s economic reforms may convince his critics that replacing him will cause further chaos in the markets.
Speaking after the G20 summit, Berlusconi said:
“We have asked the Fund to monitor and publicly certify every three months the progress of our reforms so that we can show the markets, using the authority of the IMF, that the Italian government is making progress in the implementation of the reforms.”
Berlusconi has long promised but failed to implement reforms, but the head of the IMF says she’ll be keeping a close eye on developments.
“You know, I might be laborious, I might be demanding, I might be rigorous but I will be looking at the commitments that have been made to confirm, or infirm, if that was the case, their implementation,” said Christine Lagarde.
Markets view Italy as the next domino to fall in the euro zone crisis and calls may continue for a new government to carry out reforms.
Berlusconi, one of Italy’s richest men, still has significant powers of patronage and he and his closest aides are expected to spend the weekend trying to win back support for a parliamentary showdown on Tuesday.